Hasti Finance Ltd. (HASTIFINANCE) - Director Report

Company director report

Your Directors have pleasure in presenting the 21st Annual report of the Companytogether with the audited Financial Statements for the year ended 31st March 2015.

1. FINANCIAL RESULTS:

The financial results of your company for the year ended 31st March 2015 aresummarized below:

Amount in lakhs

Particulars For the Year ended

For the year ended 31st March 2015

For the year ended 31st March 2014

Gross Income

155.60

236.49

Less: Expenses

142.65

207.59

Profit Before Interest Depreciation and amortization exceptional items and Tax

12.95

28.90

Less: Depreciation and amortization

9.41

7.06

Profit before exceptional items and tax

3.54

21.84

Add: Exceptional Item

0.28

0

Profit before Tax

3.82

21.84

Less: Provision for Taxation

2.97

6.49

Profit after Tax

0.85

15.35

Add: Balance brought forward from previous year

246.39

240.53

Profit available before appropriations

247.24

255.89

Less: Appropriations

Statutory Reserve

0.27

4.90

Contingent Provision against Standard

-

4.60

Assets

Depreciation on completion of useful life of assets

0.038

-

Surplus Carried to balance Sheet

246.93

246.39

During the year the Income of the Company was Rs.155.60 Lacs and the Profit after Taxwas Rs.0.85 Lacs (Previous Year: Rs.236.49 Lacs and Rs.15.35 Lacs respectively). TheCompanys Net Worth as on March 31 2015 stood at Rs. 2555.51 Lacs as against Rs.2554.69 Lacs last year.

An amount of Rs.0.27 Lacs is transferred to Statutory Reserve Fund (previous year Rs.4.90 lacs) pursuant to Section 45IC of the Reserve Bank of India Act 1934 No contingentprovisions against standard assets made during the year (previous year Rs.4.60 Lacs) asper RBI norms and an amount of Rs.246.93 Lacs (previous year Rs. 246.39 Lacs) are beingcarried forward in the balance sheet.

2. DIVIDEND:

Your directors are of the opinion that in order to keep the pace of the growth theCompany needs to plough back its profits and hence do not recommend any dividend duringthe year.

The provisions of Section 125(2) of the Companies Act 2013 do not apply as there wasno dividend declared and paid last year.

4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS

Your Directors wish to present the details of Business operations done during the yearunder review:

a. Business Operations and Profitability: The Company is Non Banking FinanceCompany listed on BSE ASE & MSE. To enhance the growth of the company by capturinghuge market area the company has lowered down the rate of interest due to which thecompany is experiencing decrease in total revenue of the company in the current financialyear compare to earlier financial year. Because of decrease in total revenue of thecompany the net profit of the company has also decreased in the current financial year.

b. Sales of Services: Though the company managed to keep the pace as long as therevenues are concerned Companys profitability was affected by the provisioning ofnon-performing assets as per Reserve Bank of India Prudential Norms for NBFC Loan Company.

c. Marketing and Market environment: The Company is carrying on its businessactivities on medium scale and therefore huge and extensive marketing strategies are notadopted by the company. The company has adopted small scale business marketing strategies.The company is carrying on business of providing finance and there is huge competition inthe market in this type of business sector.

d. Future Prospects including constraints affecting due to Government policies: Ourorganization is putting efforts in collecting its bad debts from customers and trying toenhance its customer base through advertisements and different marketing strategies soadopted by the company. The company is expecting more revenue in upcoming years. There areno specific industrial or Government policies which restrict the business or growth of thecompany.

5. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIALSTATEMENTS

RELATE AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateon the date of this report.

The provisions of Section 134(m) of the Companies Act 2013 do not apply to ourCompany. There was no foreign exchange inflow or Outflow during the year under review.

7. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICYOF THE COMPANY

The Company does not have any Risk Management Policy as the elements of riskthreatening the Companys existence are very minimal.

8. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATESOCIAL RESPONSIBILITY INITIATIVES

The provisions of Section 135 of the Companies Act 2013 do not apply to our Company.Hence the company has not developed and implemented any corporate social responsibilityinitiatives.

9. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013

There were no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under review and hence the said provision is notapplicable.

10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH

RELATED PARTIES

During the year the Company had not entered into any contract/ arrangement/transaction with related parties which could be considered material in accordance with thePolicy on Related Party Transactions. Pursuant to section 134(3) (h) read with Rule 8(2)of the Companies (Accounts) Rules 2014 there are no transactions to be reported underSection 188(1) of the Companies Act 2013.

11. AUDITORS REPORT

There were no qualifications reservations or adverse remarks made by the Auditors intheir Audit reports.

12. SECRETARIAL AUDIT REPORT

A Secretarial Audit Report given by D.Maniar & Co. a Company Secretary in Practiceis furnished in Annexure "A" and is attached to this report.

13. COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT

PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

The Companys Policy relating to appointment of Directors payment of Managerialremuneration Directors qualifications positive attributes independence ofDirectors and other related matters as provided under Section 178(3) of the Companies Act2013 is furnished in Annexure "B" and is attached to this report.

14. ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and administration) Rules 2014 is furnished in Annexure"C" and is attached to this Report.

15. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

The Company had 7 Board meetings during the financial year under review.

16. DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement:

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively

17. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary or Joint venture Company. The details offinancial performance of Associate Companies are furnished in Annexure "D" andattached to this report.

18. DEPOSITS

Our company is a Non deposit accepting Non Banking Financial Company during the yearunder review the Company has neither accepted nor renewed.

19. DIRECTORS

Mr. Salim Ismail Shaikh retires at this Annual General Meeting and being eligible offerthemselves for re election.

20. DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.

The total revenue of the company during the financial year 2014 was Rs.21394259/-compare to Rs.15560394/- in the financial year 2015. The net profit of the companyduring financial year was Rs.1075574/- and in the financial year 2015 is Rs.88235/-after charging provision for non performing assets of Rs. 5402175/- (previous year Rs.3618061/-)

There is no change in percentage of remuneration paid to Managing Director during theyear as compare to earlier financial year. The remuneration paid to employees in thefinancial year 2014 was Rs.7406626/- and in the year 2015 is Rs.5150854/-.

Information under Rule 5(1) (vii)

Market capitalization of the company has decrease from Rs.832491264/- at March 2014to Rs.218420560/- as at March 2015. The Price Earning Ratio in the year 2015 is 2518.75which is increased from 548.57 in the year 2014. The closing price of companysequity shares as of 31st March 2015 and 31st March 2014 is Rs.20.15/-per share andRs.76.80/- per share respectively representing percentage decrease of 14.67% as at March2014 and 77.61% as at March 2015 over the last offer price of Rs. 90/- per share.

22. FORMAL ANNUAL EVALUATION

The evaluation of all the directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board. The board approved the evaluation results ascollated by the Nomination and remuneration committee.

23. STATUTORY AUDITORS

M/s. Sandeep Rathi & Associates Chartered Accountants Mumbai were appointed asStatutory Auditors for a period of Four years in the Annual General Meeting held on29.09.2014 and their appointment as Statutory Auditor of the company is to be ratified atensuing Annual General Meeting.

The board recommend ratification of their appointment for the year.

24 . WHISTLEBLOWER POLICY

The Board has adopted whistleblower mechanism in the company. The policy adopted by thecompany is attached in Annexure "E" to the report.

The above composition of the Audit Committee consists of independent Directors viz.Mr. Manoj Kumar Padhye and Mr. Vilas Shankar Daware who form the majority.

The Company has established a vigil mechanism and overseas through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the chairman of the AuditCommittee on reporting issues concerning the interests of co employees and the Company.

26. SHARES

a. BUY BACK OF SECURITIES

The Company has not bought back any of its securities during the year under review.

b. SWEAT EQUITY

The Company has not issued any Sweat Equity Shares during the year under review.

c. BONUS SHARES

No Bonus Shares were issued during the year under review.

d. EMPLOYEES STOCK OPTION PLAN

The Company has not provided any Stock Option Scheme to the employees.

27. CORPORATE GOVERNANCE REPORT

The report on Corporate Governance required as per clause 49 of the listing agreementis attached in Annexure "F" to the Board report.

28. CORPORATE GOVERNANCE CERTIFICATE

The certificate from the auditors regarding compliance of conditions of corporategovernance as stipulated in Clause 49 of the Listing agreement is attached in Annexure"G" to the report.

29. ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Companies activities during the year under review. Your Directors also acknowledgesgratefully the shareholders for their support and confidence reposed on your Company.